Time Warner has entered exclusive talks with Google on forging a wide-ranging alliance with America Online, dashing Microsoft’s hopes of making a similar deal.

Time Warner boss Dick Parsons agreed Thursday night to shut out Microsoft and talk only with Google about sealing a deal, according to a source familiar with the matter.

The agreement could be announced as early as next Wednesday, following a two-day Time Warner board meeting, the source said.

Microsoft had been Parsons’ preferred partner for AOL, but talks dragged on for nearly a year before Google entered the picture about three months ago.

Parsons ultimately abandoned Microsoft over regulatory concerns and worries that the deal would be too complex, according to the source.

The tentative deal with Google would involve Google paying $1 billion for a 5 percent stake in AOL, a broad online advertising partnership, and a five-year extension of a current deal in which AOL’s 21 million subscribers get to use Google’s search technology.

A spokesman for Time Warner declined comment, as did a representative for Google.

If a deal between AOL and Google is finalized, cable giant Comcast could join up and become a third partner in the venture.

In October, Comcast joined Google in making a joint bid for AOL but back then, Time Warner preferred to negotiate only with Google, a source said.

When the on-going talks between Time Warner and Microsoft were first reported by The Post in September, Google, worried about losing its existing search engine deal with AOL, quickly joined the fray.

Indeed, Google had a lot to lose if AOL linked up with Microsoft: According to Merrill Lynch analyst Lauren Rich Fine, AOL accounted for 12 percent of Google’s revenue, some $380 million, last year.

If Google lost the revenue from AOL, its earnings per share would have been reduced by 5 percent to 10 percent, according to Fine’s analysis.

The AOL talks have come at an increasingly tenuous time for Parsons, having been under fire by the billionaire financier Carl Icahn, who is pushing for a break-up of Time Warner.